A sweeping budget bill passed by the U.S. Senate Tuesday would roll back clean energy tax incentives and phase out federal support for electric vehicles, rooftop solar and home energy efficiency upgrades. North Carolina officials and renewable energy advocates say the changes could have lasting consequences for the state’s economy, electric grid and climate goals.

“They’re throwing [tax credits] to the side after businesses have made investments of billions of dollars based on the federal government’s commitment,” Gov. Josh Stein said Tuesday. “It’s going to cost the state thousands and thousands of jobs.”

The legislation, widely referred to by Republicans as the “Big Beautiful Bill” but stripped of that title during Senate floor proceedings, passed after a marathon overnight session. Vice President JD Vance cast the tie-breaking vote. The bill now heads to the House, where Republican leaders are pushing for final passage before the July 4 holiday.

Supporters say move cuts waste and promotes energy independence

Republican senators backing the legislation argue that scaling back subsidies is a step toward fiscal responsibility and market-driven growth.

Senate Majority Leader John Thune said the bill aims to “restore American energy dominance” by promoting conventional energy, cutting regulations and reducing reliance on federal incentives.

Sen. Ted Budd, R-N.C., also voted in favor of the measure, citing broad benefits for his state and the nation. “The people of North Carolina deserve more of their hard-earned wages, a more secure border, a reinvigorated military, responsible spending reforms for government programs, and a thriving economy,” Budd said in a statement.

“I hope my colleagues in the House quickly get this bill on President Trump’s desk because Americans cannot afford the largest tax increase in our nation’s history,” Budd said.  

Several senators also cited the need to simplify the tax code and prioritize what they described as “energy independence” through expanded fossil fuel development.

A proposed excise tax on solar and wind projects was removed in a last-minute amendment after backlash from energy groups and key GOP senators. Still, the broader rollback of clean energy support remains. The bill phases out production and investment tax credits for wind and solar by 2027 and eliminates several household energy programs, including the Residential Clean Energy Credit, the Energy Efficient Home Improvement Credit and the New Energy Efficient Home Credit, by the end of this year.

Clean energy groups warn of setbacks

North Carolina ranks second nationally in installed solar capacity and has attracted major investments in battery storage and electric vehicle manufacturing. Industry groups say the rollback could jeopardize that momentum.

“At a moment when the U.S. was poised to unleash a domestic energy and technology manufacturing boom our economy has not seen since the end of World War II, it’s disappointing to see a budget passed that does not prioritize the need for affordable, reliable energy resources,” said Josh Brooks, chief of policy strategy and innovation at the North Carolina Sustainable Energy Association. “We need clean energy to keep costs affordable and the grid reliable.”

The American Clean Power Association had warned that the now-removed excise tax alone could have added $7 billion in unexpected costs to the solar and wind sectors. Clean energy stocks rebounded Tuesday following the amendment. Shares of Sunrun rose 9%, while inverter manufacturers such as Enphase and SolarEdge gained between 4% and 8%. But developers say the rest of the bill could still stall hundreds of planned projects.

Household impacts and national competitiveness

The elimination of household energy credits has drawn concern from groups focused on lowering utility bills and expanding access to energy efficiency upgrades.

“Eliminating the home energy credits means fewer households can afford heat pumps, rooftop solar or insulation — proven upgrades that cut bills and ease pressure on the grid,” said Ari Matusiak, CEO of Rewiring America. “Families will face rising electricity costs with fewer tools to do anything about it.”

Matusiak said the timing is especially risky, as demand from artificial intelligence, data centers and domestic manufacturing surges. “We need low-cost, abundant energy to compete globally,” he said. “We will become collectively poorer, less resilient and less equipped to lead in a rapidly changing world.”

Heather O’Neill, president and CEO of Advanced Energy United, said the legislation threatens both energy security and economic opportunity. “The advanced energy industry will endure, but the downstream effects of these rollbacks will be felt by American families and businesses for years to come,” O’Neill said.

What’s next

The bill now moves to the U.S. House of Representatives, where final changes could still be made. Lawmakers are under pressure to act quickly ahead of the July 4 recess.

President Donald Trump has indicated he would sign the bill if it reaches his desk.

Gov. Stein said the bill prioritizes corporate tax breaks over working families. “You’re asking, why are they doing these damaging things?” he said. “It’s to give tax breaks to the wealthiest among us and corporations. It’s a disgrace.”